BCE vs. TELUS: Which Telecom Dividend Stock Makes More Sense in 2026?

As investors hunt for reliable income in 2026, two of Canada’s biggest telecom names — BCE Inc. (TSX: BCE) and TELUS Corporation (TSX: T) — are drawing attention because of their hefty dividend yields and essential service footprints. Although both companies face industry headwinds, their strategies and risk profiles differ significantly, making one potentially better suited depending on your goals.

At first glance, the most obvious difference is yield. TELUS currently offers a much higher dividend yield, appealing to investors seeking strong immediate income. That high payout alone can be enticing if you’re focused on generating cash flow now. However, it also reflects market skepticism about sustainability — a very high yield often signals elevated risk rather than pure opportunity. TELUS’s dividend growth is currently on pause as the company works to reduce leverage and improve its cash-flow profile. This means the quarterly payout remains consistent, but investors shouldn’t expect regular hikes until the balance sheet strengthens and management resets growth guidance.

Also Read: Long term investing in Canada

In contrast, BCE’s dividend is now lower but more conservative after a notable cut. The company took this step to shore up its finances, reduce debt, and invest in growth areas such as fibre expansion and enterprise solutions. A lower payout ratio means BCE’s dividend is better covered by free cash flow, reducing the chance of another cut and offering a more stable baseline for income investors in 2026. BCE is also pursuing capital growth alongside its distribution, including U.S. expansion and tech-oriented services that may contribute to future earnings.

Also Read: Dividend paying stocks Canada

So which is better for 2026? If the priority is immediate income with a willingness to accept risk, TELUS’s higher yield could be attractive — particularly if you believe in its cash-flow targets and deleveraging plan. But if you prefer dividend sustainability and potential capital stability, BCE’s reshaped payout and stronger cash-flow coverage might be the smarter play. Ultimately, your choice depends on whether you lean toward income now or stability plus growth over time.